Here at Kris Pedersen Mortgages, we make the complex process of getting a mortgage a whole lot simpler. We do the leg work for you to get a mortgage approved, so that you can get onto the more important stuff like finding the right house for you, rather than stressing about finance. We’ll give you all of the info you need to know, explain what the banks look for in applications, and help you get the best possible deal for your mortgage.
We work with a wide range of lenders, not only banks – so even if your situation is a bit more difficult, we can help. We meet with you and discuss your plans, and what is possible for you when it comes to getting a loan. Once we’ve got you approved, we can discuss interest rates, how to structure your loan and align this structure with whatever your goals are.
Best of all, banks pay us a commission – so under most circumstances our advice to you is free*.
*T’s & C’s apply.
Banks generally are comfortable to lend to 80% of a standard residential property’s value under standard criteria – if you’re living in it. Banks will look at loans up to 95% however at the time of writing this they can only lend 1 loan above 80% LVR to every 10 under 80% LVR due to current Reserve Bank regulation. So essentially loans over 80% are rationed and therefore harder to get.
Banks normally like to see genuine savings as the deposit. But it is of course possible to get assistance from family or friends. This may be by gifting or the other party being a guarantor or by a family loan. Kiwisaver is also an option, along with First-Home Grants.
This is becoming more common as property values have risen which in turn means that a 20% deposit is a significant sum to save. There are various ways that a family member can assist: gifting money, guaranteeing the loan or by way of a formal loan. There are pros and cons to each approach which your adviser and your lawyer can explain.
Once you have been contributing to KiwiSaver for at least three years you become eligible to withdraw funds from your KiwiSaver balance towards your first home. You may also be eligible for a subsidy from the government (via Kainga Ora – see here for more details).
This question is something that is often asked by people looking for a mortgage, and it’s always something that we have the same answer to; it depends. The income you need to support a particular loan amount depends on a range of factors, such as your deposit amount, the nature of your income (salaried, self-employed, bonus, commission, etc.), how much other debt you have (if any), and the nature of that debt (Student Loan, Car Loans, Credit Cards, etc.), and your living costs. As a result, there are so many variables that are to be considered, and therefore it is hard to give a blanket answer to this question.
For more information around how banks assess affordability, check out our blog here.
If you’d like an assessment on your particular situation, get in touch.
Along with above criteria Banks will look at construction loans. There are three main types. These can be turnkey, fixed price contract or material and labour basis. We can discuss the differences with you, but in summary banks can usually lend a higher LVR on these loans (e.g. 80% for a rental property that is a new-build) as they are exempt from the LVR rules. Banks have relatively strict criteria on these loans.
In New Zealand there are a few different ways that mortgages can be structured: